18 May 2012
Gas Malaysia IPO Update: 333.84 million shares offered for sale will be from existing shareholders, price fixed at RM 2.20 per share
Its position as the sole licensed operator and distributor of natural gas in Peninsular Malaysia and a high dividend payout policy are among factors attracting investors to Gas Malaysia Bhd.
The debt-free company, with small capital expenditure requirements for the next few years, expects to pay out as dividends its entire consolidated after tax profit for the financial year ending Dec 31, 2012.
It is looking at a payout ratio of not less than 75 per cent of its consolidated after tax profit for 2013.
Its managing director, Datuk Muhamad Nor Hamid, said on Friday Gas Malaysia's major spending will be this year where it will invest RM130mil to RM140mil for pipeline expansion and infrastructure in preparation for the distribution of the liquefied natural gas that would be supplied by Petronas from Malacca.
It would be expanding its pipeline by 70km to 90km to supply new customers and strengthen supply security.
Even then, it would be financed with internal funds, he said at a press conference after the launching of Gas Malaysia's prospectus.
"At least for the next three to four years, we don't need to raise extra capital," he said, adding that for the next few years, the annual capex requirement for Gas Malaysia would be around RM30mil to RM40mil.
Gas Malaysia, which operates 1,800 km of pipelines across Peninsular Malaysia, gets all its natural gas supply from Petronas.
Commenting on the dip in net profit to RM229.2mil for 2011 against RM298.3mil in 2010, he said it was due to the new gas tariff which resulted in the lower margin.
Its revenue in 2011 increased to RM2bil from RM1.807bil in 2010.
However, the profitability should start to pick up again with growth in revenue and volume with the addtional gas to be supplied by Petronas, Muhamad said.
Gas Malaysia has 700 industrial customers, 519 commercial customers and 10,612 residential customers for natural gas, while its liquefied petroleum gas customers comprise one industrial customer, 1,132 commercial customers and 20,663 residential customers.
He said 99% of Gas Malaysia's revenue is derived from the 701 industrial customers.
The company is scheduled for listing on the Main Market of Bursa Malaysia Securities Bhd on June 11.
In conjunction with its listing, the existing shareholders will offer for sale 333.840 million shares with indicative initial public offering price of RM2.20 each.
Upon listing, MMC-Shapadu (Holdings) Sdn Bhd will see its stake reduced to 40.7% from 55%, while Tokyo Gas-Mitsui & Co Holdings Sdn Bhd's stake will come to 18.5% from 25% and Petronas Gas Bhd's stake reduced to 14.8% from 20%.